Kioxia Enters Bear Market; Technical Risks Could Send Stock Lower

Kioxia shares have moved into a bear market after trading at ¥50,780, more than 54% below this year’s peak. The stock is below its 50‑ and 100‑day exponential moving averages and has formed a pennant pattern on the daily chart. If the price breaks below the pennant’s lower trend line, ¥35,970-Kioxia’s July low-is the initial support level cited by technical analysts.

The decline in Kioxia’s share price follows weakness across the memory sector. Major memory companies including Micron, SanDisk, Samsung Electronics and SK Hynix have seen share-price declines, and a DRAM-focused ETF has fallen more than 27% from its peak this year. The Kioxia share price has traded in a narrow range beneath key moving averages in recent weeks.

Kioxia is a major producer of NAND flash memory and benefited from stronger demand for products used by data centers and artificial intelligence workloads. Earlier this year the company was the largest by market value in Japan. The sector has experienced cyclical swings: Kioxia’s revenue fell to $9.0 billion in 2023 from $11.7 billion the prior year, and peers reported similar revenue drops when demand cooled.

Corporate results for the most recent quarter show a sharp recovery in the current cycle. Kioxia reported second‑quarter revenue of ¥1.78 trillion, a 415% increase year‑on‑year, and profit of ¥842 billion, up more than 400% from the year‑earlier quarter. Management attributed the gains to higher shipment volumes and elevated memory prices driven by data center orders. The company reported total current assets above ¥2.4 trillion.

Kioxia maintains a long-running joint venture with SanDisk for NAND development and supply. Nearly all of SanDisk’s flash memory supply comes from that venture, and Kioxia owns manufacturing facilities in Japan. SanDisk has secured long-term contracts with eight large customers that the companies estimate will be worth more than $90 billion at the low end. Kioxia and SanDisk have committed to roughly $31 billion of investment in Japan for production capacity and technology development.

Market participants are watching both fundamental indicators such as data center demand and contract rollouts and technical signals on the chart to assess whether the recent earnings recovery will be sustained or whether price weakness will continue.